The prodigal son has returned to the fold, and Malcolm Smith is happy to have him back.

That is the way the Democratic conference of the state Senate portrayed an apparent agreement between Sen. Pedro Espada (D-Bronx), who helped orchestrate a Republican overthrow of the Democrats June 8, and Sen. Malcolm Smith (D-St. Albans), to re-establish a Democrat majority in the turmoil-ridden chamber.

When the Senate next convenes, Smith will hold the position of president pro tem, Espada will be the majority leader, and state Sen. John Sampson (D-Brooklyn) will maintain the enigmatic position of “conference leader.” Sampson indicated that Smith would continue to hold the president position indefinitely, contradicting earlier reports in the media.

“We continue do have our differences of opinion,” Smith said of the infighting that has kept the Senate from getting any work done for more than a month. “Has the road been a little bumpy with some twists and turnsi No question about it. But what you see before you today is that once again Democrats have come together.”

The senators also promised reforms in the legislative process that would more evenly distribute discretionary funding throughout the chamber and allow any member to bring a bill to the floor for a vote.

Spirits ran high during a Democratic news conference Thursday evening. Smith, the former Senate majority leader, and Espada, who crossed over to the Republican side to remove the Queens Democrat, embraced and grinned. At one point they held their clasped hands together in the air in a victory gesture. Before making some brief remarks, Sen. Ruben Diaz (D-Bronx) led the group of eight senators in singing “Happy Birthday” to one of the Albany reporters.

When asked point-blank by a reporter what conditions were met and what promises were made to entice Espada back across the aisle after a month of harsh language and allegations of illegal conduct, Smith and Espada made a show of merely shaking hands.

“We have a unique collaboration here and we didn’t need any contracts or binding agreements,” Espada said. “We came to an understanding of the minds.”

In a televised news conference Thursday, Gov. David Paterson said he was happy the situation was resolved, though he criticized the Senate for taking a month to do it.

“Perhaps out of the dark cloud that has obfuscated work for the past month there will be a silver lining of reform and accountability,” the governor said, noting he would call the Assembly and Senate back into session to revise the state budget in about a week when the next economic forecast report comes in. That report is expected to show up to an additional $800 million gap due to declining revenues.

Espada did apologize for the chaos he and Sen. Hiram Monserrate (D-East Elmhurst) caused when they voted with the Republicans to oust the Democrats from leadership, but said the rules reforms promised by the new Democratic majority were worth the price.

“We needed this exchange,” he said. “It happened in public. It happened and it took too long and I’m sorry. But I’m not sorry for the opportunity and the restarting of this era of the Democratic conference that will bring the Republican conference into a new reality.”

Reach reporter Jeremy Walsh by e-mail at jewalsh@cnglocal.com or by phone at 718-229-0300, Ext. 154.